Federated Industries (A)

Abstract

The market leader in an overcapacity industry with a commodity product is trying to restore industry price levels. Price cutting has hurt overall industry price levels and the leader must determine whether (and how) to bring up price levels or exit the market.

StepSmart Fitness, a manufacturer of exercise equipment, is undergoing a sweeping reorganization. The new CEO has terminated the District Sales Director and Regional VP and promoted 30-year-old Benjamin Cooper to manage the underperforming New England district. A first-time manager with no one to train him or explain the causes of the district's underperformance, Cooper has 10 weeks to diagnose the problems and make recommendations that will ensure a turnaround in the territory in less than 16 months. Left to his own devices, Cooper must review the sales data, the incomplete notes left by his predecessor, and his own thoughts after spending a day in the field with each sales person. Then he must make decisions about termination or probation for current employees, the hiring of additional salespeople, ways to increase productivity, and potential new methods of evaluating salesperson performance. He is set to present his conclusions to his also-newly-appointed manager, the Regional VP for the Northeast, in a few days.